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Consummate Consumer

The Rebate Check May Not Be in the Mail

By Don Oldenburg
Washington Post Staff Writer
Tuesday, February 1, 2005; Page C10

When college student John Coleman bought a $100 Cingular wireless phone in early October, the $50 rebate offer was the deal maker. But after 14 weeks and no rebate check, he was having second thoughts.

"Why is it always so difficult to get rebates?" asks Eleanor Coleman of Hickory, N.C., John's mother and a consumer rights advocate.

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She learned her lesson a few years ago when she got stiffed on a computer-printer rebate, she says, and received a rebate for buying a CD player only after badgering corporate executives. "I vowed never to buy a product touting rebates again," Eleanor says.

When John received a letter eight weeks after mailing in his rebate request stating it couldn't be processed because it was an "invalid phone model," her worst suspicions resurfaced. John's phone was among the rebate-eligible models listed on the rebate form.

When Eleanor called the rebate toll-free number, she was assured the phone was eligible and was told the problem would be investigated. Since then, each time she has called about the rebate, she says, she was told it is "being looked into."

Says Eleanor: "I have been so frustrated with this process. Will we ever get the money?"

When a rebate deal goes smoothly, consumers get a good bargain for doing a little grunt work and companies boost product sales. But when things go wrong, consumers think conspiracy.

Rebates entice consumers into paying full price upfront and gaining the sale price afterward. Companies count on a certain percentage of buyers not redeeming their rebates because they misplaced forms, lost receipts, missed deadlines or forgot about them. Failure to meet multiple rebate requirements -- filling out forms, clipping bar codes, making photocopies of receipts and mailing them -- adds another percentage of disqualified rebates. Then there's what the industry calls "slippage" -- the percentage of people who get a check and forget to cash it.

"It is certainly bait," Consumers Union senior attorney Gail Hillebrand says of the rebate. "Whether it is a bait-and-switch depends on how hard the company makes it to get the rebate."

How many rebates go unfulfilled? In calling on California Gov. Arnold Schwarzenegger to approve a consumer protection bill that would have simplified rebates, Consumers Union noted "widely quoted estimates" that 60 percent of all rebates go unfulfilled. (Schwarzenegger vetoed the bill.) Timothy Silk, an assistant marketing professor at the University of South Carolina who is studying rebates, thinks unpaid rebates more likely range as high as 33 percent. But only manufacturers and the rebate fulfillment houses know for sure -- and they aren't telling.

The marketing information on the Web site of TCA Fulfillment Inc., a national rebate services house, does give clues, telling prospective clients that its rejection rate, the percentage of rebate requests received that don't pass muster, "should average 12-22 percent."

Paula Rosenblum, director of retail research at Aberdeen Group, a Boston-based market research firm, doesn't think companies are intentionally ripping off rebate customers. "They are expecting some percentage of consumers will space out and forget, some percentage won't bother. And in some cases their requirements are so complicated -- like get the serial number off the hard drive you've already installed -- that the rebate won't happen," she says. "They are relying on that. But I don't see a lot of malice. I don't think they are intentionally not paying."

Silk says what appear to be overly complicated procedures often are how manufacturers combat rebate fraud, in which criminals mass-produce rebate forms and redeem them. His research finds that a large proportion of people buy a product and don't intend to redeem the rebate. "All this talk about it being an unfair practice may not really be the case," he says.

Still, the Federal Trade Commission cautions consumers against being "baited" by rebates. Over the past six years, it has brought about 12 cases involving rebates against companies by citing unfair or deceptive practices. But there are no laws that specifically address rebates gone wrong.

"My advice to consumers is, if you are persuaded by a rebate price, you are foolish for not understanding there are some things you are going to have to do in order to redeem the rebate," says FTC staff attorney Matthew Gold.

Cingular Wireless investigated John Coleman's rebate problem and determined that he entered the bar-code number incorrectly on the rebate form -- although the correct bar-code number was on the receipt he mailed in.

"We apologize to Mr. Coleman for not following up with him as promised," says Cingular spokesman Clay Owens, who last week overnighted a $50 rebate check to the Colemans. "We do urge customers to be careful in filling out their rebate forms so that they receive their rebates in a timely manner."

BE PENNY-WISE

For information on rebates and other consumer issues, visit Consumers Union online at www.consumersunion.org.

The Federal Trade Commission's brochure on rebates is available online at www.ftc.gov/bcp/conline/pubs/alerts/rebatealrt.htm, or call 877-FTC-HELP.

Got questions? A consumer complaint? A helpful tip? E-mail details to oldenburgd@washpost.comor write Don Oldenburg, The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.


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